To protect savings of gullible investors, the Centre on Wednesday introduced a Bill in the Lok Sabha that proposes stringent provisions to clamp down on ponzi schemes. The provisions include imprisonment of up to 10 years for wrongdoers and confiscation of assets of firms found to have accepted deposits without authorisation.
The Banning of Unregulated Deposit Schemes Bill, 2018 proposes to make specified offences cognisable and non-bailable. It has proposed prison terms of one to 10 years for offenders, besides fines for wrongfully inducing people to unlawful schemes. Directors and officials of such companies will also be prosecuted.
The Bill adopts best practices from state laws and entrusts the primary responsibility of implementing provisions of the legislation with the state governments.
According to a CBI estimate in 2016, Rs 68,000 crore was collected from more than six crore depositors by such illegal deposit-taking entities using a large network of commission agents promising high returns. However, the CBI has said there has been no study or authentic estimate of the real size of such deposit-taking activity across the country.
The government also introduced another bill — the Arbitration and Conciliation (Amendment) Bill, 2018 — to set up a new regulatory body, Arbitration Council of India, for promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.